Stinson v. Thorson
| Decision Date | 26 April 1916 |
| Citation | 158 N.W. 351,34 N.D. 372 |
| Court | North Dakota Supreme Court |
Rehearing denied June 20, 1916.
Appeal from the District Court of Grand Forks County, Pollock, J.
McIntyre & Burtness, V. R. Lovell, and L. E. Birdzell, for appellants.
Appellants insist that under our constitution and statute law the school board of the Independent School District of Grand Forks have the right to use money raised and levied for a certain purpose, for other school purposes, and when such money is not needed for the specific purpose for which it was raised to divert it, and use it for other immediate school purposes and that money raised for teachers' wages, when not so needed, may be diverted and transferred over into the general fund of the district for general purposes, including the erection of a school building and the use of said fund towards the payment of the bills in connection therewith. Nor is such school board required to specifically levy for as many funds as there are purposes enumerated for which levies may be made. Comp. Laws 1913, §§ 1297, 1298; Const. § 175; State v. Klectzen, 8 N.D. 291, 78 N.W. 984, 11 Am. Crim. Rep. 324; State ex rel. Reed v. Merriam County, 21 Kan. 436.
The law prescribes the same fiscal regulations for this district as for common and special school districts. Comp. Laws 1913, §§ 1212, 1297, 1298, P 7.
School districts are required to keep only a state tuition fund, a general fund, and a sinking fund, and the Constitution is satisfied when these funds are kept. Comp. Laws 1913, § 1212; Const. § 175.
Section 1298 of the Compiled Laws of 1913 does not define funds, but only provides the form of the levy. 2 Dill. Mun. Corp. 5th ed. P 860; School Dist. v. Western Tube Co. 13 Wyo. 304, 80 P. 155; Western Town-Lot Co. v. Lane, 7 S.D. 1, 62 N.W. 982; Dakota County v. Bartlett, 67 Neb. 62, 93 N.W. 192; Thomas Kane & Co. v. Hughes County, 12 S.D. 438, 81 N.W. 984; Comp. Laws 1913, § 1298; Thomson v. Harris, 88 Hun, 478, 34 N.Y.S. 885.
The proceeds of the levy must be used for the prospective needs of the district in contemplation when the levy was made, unless otherwise authorized by law. Comp. Laws, 1913, §§ 1298, 1308; N.D. Const. §§ 130, 174; Cooper v. Wait, 106 Ky. 628, 51 S.W. 161.
Section 175 of our Constitution does not prohibit transfer of unexpended balances for a purpose not in contemplation at the time the tax was levied. Field v. Stroube, 103 Ky. 114, 44 S.W. 363; Whaley v. Com. 110 Ky. 154, 61 S.W. 35; State ex rel. Jackson v. Butler County, 77 Kan. 507, 94 P. 1004; Miller v. Merriam, 94 Iowa 126, 62 N.W. 689; Howard v. Huron, 6 S.D. 180, 26 L.R.A. 498, 60 N.W. 803.
This section is satisfied when the revenue raised for a particular purpose for a given year is employed to meet the obligations of that year. Cooper v. Wait, supra; Fuller v. Heath, 89 Ill. 311; Com. v. Brown, 91 Va. 762, 28 L.R.A. 115, 21 S.E. 357; People ex rel. Burrows v. Orange County, 27 Barb. 575, 17 N.Y. 235; People v. National F. Ins. Co. 27 Hun, 188.
The designation of a fund has no relation to the object of a tax, but is a mere accounting device. Com. v. Brown, 91 Va. 762, 28 L.R.A. 110, 21 S.E. 357; 2 Lewis's Sutherland, Stat. Constr. 2d ed. §§ 443, 448; Conn v. Cass County, 151 Ind. 517, 51 N.E. 1062; Cincinnati v. Connor, 55 Ohio St. 82, 44 N.E. 583; Chalfant v. Edwards, 176 Pa. 67, 34 A. 922.
Practical construction of a statute by officers whose duty it is to administer the law is admissible in aid of construction. Garr, S. & Co. v. Sorum, 11 N.D. 174, 90 N.W. 799; 2 Lewis's Sutherland, Stat. Constr. 2d ed. § 474; § 710, 1895 Code with § 710, 1899 Code; Comp. Laws, 1913, §§ 1208, 1212; Bryan v. Board of Education, 7 Okla. 160, 54 P. 409; Hickman College v. Colored Common School Dist. 111 Ky. 944, 65 S.W. 20.
The assets of the municipal corporation not specifically required or appropriated to meet anticipated expenditures are available to accomplish any authorized object. Miller v. Merriam, 94 Iowa 126, 62 N.W. 689; 1 Abbott, Mun. Corp. §§ 146, 411; 3 Abbott, Mun. Corp. § 1071.
Section 1298 of our Compiled Laws is not absolutely mandatory as to the manner in which taxes are to be levied and accounts kept. It merely conveys authority to levy taxes. It does not prescribe a fiscal system. The purpose for which one annual levy is made is entirely distinct from that for which another annual levy is made. Each one is made to provide revenue to meet obligations of the district for a distinct and separate current year. Cooper v. Wait, 106 Ky. 628, 51 S.W. 161; 2 Dill. Mun. Corp. 5th ed. P 860.
Section 1298 of our 1913 Laws does not rise to the dignity of a mandatory statute, even as applied to the levy of the taxes, much less as applied to the method of accounting. Thomson v. Harris, 88 Hun, 478, 34 N.Y.S. 885; School Dist. v. Western Tube Co. 13 Wyo. 304, 80 P. 155.
If respondents are correct in their interpretation of this law, then whatever authority is given in the statute to raise and apply money in a certain way or direction, the implication would follow that such moneys would constitute a fund, and a warrant drawn upon this fund would not be payable out of the general fund. This is not the law. Thomas Kane & Co. v. Hughes County, 12 S.D. 438, 81 N.W. 894; Dakota County v. Bartlett, 67 Neb. 62, 93 N.W. 192; Western Town-Lot Co. v. Lane, 7 S.D. 1, 62 N.W. 982.
Bangs, Netcher, & Hamilton, Murphy & Toner, and Bangs & Robbins, for respondents.
These school districts are agencies created by the state to carry out its educational purposes, and are vested with limited corporate powers. They are a species of public corporation resembling counties, townships, and road districts, and are in no true sense municipal corporations. Sanders v. Independent School Dist. 35 S.D. 48, 150 N.W. 473; People ex rel. Cairo & St. L. R. Co. v. Trustees of Schools, 78 Ill. 136; People ex rel. Biddison, v. Board of Education, 255 Ill. 568, 99 N.E. 659; Heller v. Stremmel, 52 Mo. 309; Thogmartin v. Nevada School Dist. 189 Mo.App. 10, 176 S.W. 473; Madden v. Lancaster County, 12 C. C. A. 569, 27 U. S. App. 528, 65 F. 188; Wharton v. School Directors, 42 Pa. 358; Freeland v. Stillman, 49 Kan. 197, 30 P. 235.
Aside from bond issues, the revenue of the school district is derived from the following sources: Tax Levied by the Board ( § 1298); State Apportionment (§ 1208); County Apportionment (§ 1224).
The question at issue is whether or not this county apportionment fund is appropriated by §§ 1297 and 1298 to the payment of teachers' salaries, or is it of a floating character, and may it be devoted to building or other purposes, thus augmenting the amounts raised therefor by taxation. If the diversion theory is not adopted, it is clear that this county apportionment fund cannot be diverted to the building fund, or used for building purposes. Comp. Laws, 1913, §§ 1298, 1302; State Const. § 175.
The school board cannot make a levy for one purpose and then divert the funds raised thereby to another and wholly different purpose. Neither can the board raise taxes faster than they are needed for the purposes levied. Comp. Laws 1913, §§ 1297, 1298, 1301 and 1302; Midland Twp. v. Roscommon Twp. 39 Mich. 424; Michigan Land & Iron Co. v. L'Anse Twp. 63 Mich. 700, 30 N.W. 331; Keystone Lumber Co. v. Bayfield, 94 Wis. 491, 69 N.W. 162; Vreeland v. Bayonne, 58 N.J.L. 126, 32 A. 68; Allen v. Peoria & B. Valley R. Co. 44 Ill. 85; 2 Cooley, Taxn. 1435.
The very purpose of this restriction is to prevent deception and furnishing money that might by some indirection be used for objects not approved or intended. Westinghausen v. People, 44 Mich. 265; State ex rel. Lima v. Pohling, 1 Ohio C. C. 486, 1 Ohio C. D. 271; State ex rel. Nieman v. Fangbouer, 14 Ohio C. C. 104, 12 Ohio C. D. 801, 7 Ohio Dec. 334.
Every law imposing a tax shall state distinctly the object of the same, to which it shall be applied. Kan. Const. 1855, art. 11, § 3; Northup v. Hoyt, 31 Ore. 528, 49 P. 754; Bowers v. Neil, 64 Ore. 104, 128 P. 433; Ark. Const. 1860, § 5, art. 10 adopted the 1858, Kan. and 1851 Ohio section in toto as § 11, art. 16.
The Kansas law has been adopted here, together with its interpretation. N.D. Const. § 175; S.D. Const. § 8, art. 11; Wash. Const. art. 7, § 5; Wyo. Const. Art. 15, § 13; State ex rel. Reed v. Marion County, 21 Kan. 419, Anno. ed. 308; National Bank v. Barber, 24 Kan. 543, Anno. ed. 382; State v. Emporia, 57 Kan. 710, 47 P. 833; Smith v. Haney, 73 Kan. 506, 85 P. 550.
Wisconsin, without the aid of a constitutional provision, denies the right to divert such funds. Weik v. Wausau, 143 Wis. 645, 128 N.W. 429; Rice v. Milwaukee, 100 Wis. 516, 76 N.W. 341; State ex rel. Board of Education v. Haben, 22 Wis. 660.
The same is true of Minnesota. Mitchell v. St. Paul, 114 Minn. 141, 130 N.W. 66.
Section 1212 has reference to the funds of the Common School Districts which are authorized by § 1222, but such tax is a general tax for all purposes.
This law does not apply to Independent School Districts. Comp. Laws 1913, §§ 1298, 1301 and 1308; Price v. Fargo, 24 N.D. 440, 139 N.W. 1054.
Trial de novo. The complaint alleges that those defendants who comprised the Board of Education of the Independent School District of the city of Grand Forks have made a contract with the other defendants for the erection of a new high school building; that, under § 183 of the Constitution, and § 1303, Comp. Laws 1913, the total debt limit of said district was 5 per cent of the 1914 assessed valuation of $ 4,737,845.00, or $ 236,892.25; that the said district was already bonded in the sum of $ 175,000 that there were available assets not to exceed $...
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